SOCIAL MEDIA END RUN - LinkedIn post denudes non-solicitation restriction

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Non-competition provisions are common for employees and enforceable in most states. The provisions can take various forms. However, the two most common are: (1) straight non-competition, which prevents the employee from competing or working for a competitor and (2) a non-solicitation restriction, which prohibits the employee from soliciting the customers of the employer. The non-solicitation version is less restrictive than the straight non-competition provision, because the ex-employee can compete and work for a competitor, but just may not solicit the customers of the prior employer. But what happens if there is a way to make known to customers that the employee is no longer working for the prior employer, and by implication, is now available to receive orders from customers who the ex-employee had contact with during his/her prior employment? Would this violate a non-solicitation restriction?

Enter LinkedIn (or similar social networks). In a recent case (BTS USA Inc. v Executive Perspectives LLC), an employee of a Connecticut company was bound by a non-solicitation restriction. This employee also maintained a personal LinkedIn account. Presumably, many of the customers of the employer were his/her contacts on LinkedIn. So, when the now ex-employee posted a status change, which in turn notified all of his contacts that he has a new job with a competitor, would this posting violate the non-solicitation provision? The Connecticut Superior Court decided that the particular non-solicitation provision was silent on the use of a social network, and therefore the posting did not violate the provision. So, the ex-employee was permitted to notify the customers of the prior employer of his new position with a competitor through the posting of a status update on LinkedIn.

Bottom Line: Use of social networks should be specifically covered in non-competition/non-solicitation clauses. Additionally, employment agreements and handbooks should provide that ownership of social network accounts used by employees for marketing purposes should be owned by the employer.

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William Galkin manages GalkinLaw. Mr. Galkin has dedicated his legal practice to representing Internet, e-commerce, computer technology and new media businesses across the U.S. and around the world. He serves as a trusted adviser to both startup and multinational corporations on their core commercial transactions.

  
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